Gulfsands Makes Oil Discovery in Syria

- Gulfsands Makes Oil Discovery in Syria

Friday, August 26, 2011
Gulfsands Petroleum plc

Gulfsands provided this update on operations in Syria.

Block 26 Drilling Operations

Yousefieh East Exploration Well (Yous-6)

The Yousefieh East exploration well ("Yous-6") has been drilled using the Crosco-E401 rig to test an undrilled structural high in Cretaceous age carbonates located approximately 3 kilometers to the east of the Yousefieh field discovery well (note, this well was erroneously referred to as Yousefieh-8 in a Gulfsands Petroleum plc News Release dated July 11th 2011). The Yous-6 well was deviated at an angle of up to 36 degrees to the vertical in order to avoid obstructions to drilling operations on the surface directly above the target location.

The Yous-6 well encountered oil bearing Cretaceous Massive Formation reservoir at a depth of 2045 meters Measured Depth Below Rotary Table ("m MDBRT") or 1560 meters True Vertical Depth Sub-Sea ("m TVDSS"), 28 meters deep to prognosis. The well penetrated the hydrocarbon bearing Massive reservoir section at an angle of approximately 29 degrees to the vertical. Two twelve meter core sections, parts of which were oil stained, were recovered from the wellbore over the interval 2055-2079m MDBRT (1569-1590m TVDSS). Interpretation of wireline logs indicates a gross porous reservoir interval of 18.1 meters was encountered overlying a non-porous interval, and having a net oil column of 12.8 meters, average porosity of 18% and average oil saturation of 69%.

Pressure data obtained via wireline logs indicates that the oil bearing reservoir is slightly depleted versus initial reservoir conditions, indicating that the Yousefieh East structure is likely to represent an eastern flank extension of the Yousefieh field which is currently on production at approximately 2,600 barrels of oil per day ("bopd"). Reservoir permeability in the Yous-6 net reservoir section is interpreted to be of similar quality to that encountered in the main producing areas of the Yousefieh field.

The Yous-6 well was production tested and produced at an average oil flow rate of approximately 250 bopd of 20 degree API oil for 4 hours on 2 inch choke under nitrogen assisted lift conditions with no water production. The well will be tested further following acidization of the reservoir in a rig-less operation.

Due to a thinner oil column encountered in this well versus other Yousefieh wells, the Yous-6 well will require the installation of permanent artificial lift facilities in order to flow continuously. The Yous-6 well is located within the Yousefieh field Development License Area and can be quickly tied back and produced into the existing Yousefieh field production facilities once artificial lift facilities are secured. Procurement of the relevant equipment is in progress.

The impact of Yous-6 on Yousefieh reserves will be evaluated as part of the year-end reserves review.

Safa-1 Exploration Well

Operations have been completed on the Safa-1 exploration well which was drilled using the Crosco M-501 rig. This well targeted a fault-bound dip closed structure of Cretaceous aged reservoir on trend and approximately 7 kilometers north of the Khurbet East Field.

The Safa-1 well is interpreted to have encountered the Cretaceous Shiranish Formation at 1937m MDBRT (1448m TVDSS) and the Cretaceous Massive Formation at 1953m MDBRT (1464m TVDSS). Three consecutive core sections were cut between 1942m and 1975m MDBRT (1453m and 1486m TVDSS), with a total recovery of 31.4 meters of core, sections of which were stained with viscous oil. Evaluation of wireline logs indicates a net reservoir interval of 9.9 meters with an average porosity of 13% and an average oil saturation of 74%.

Well testing operations were conducted in open hole over sections of the gross reservoir column in three stages, however only formation water of low salinity plus traces of viscous oil were recovered to surface, even after an acidification of the net reservoir interval was performed.

The Safa-1 exploration well therefore has been plugged and abandoned as a non-commercial heavy oil discovery.

Forward Drilling Program

Gulfsands drilling operations in Syria Block 26, using the Crosco E-401 and M-501 drilling rigs, will continue as planned with the drilling of one development and one exploration well.

The Khurbet East-20 well is planned as a delineation well to further evaluate the northern flank of the Khurbet East field. The Wardieh-1 exploration well will target a new exploration play, a combined structural/ stratigraphic trap located on the southern flank of the Souedieh Field at the Cretaceous "Massive" level.

Block 26 Oil Production

Production operations on Block 26 continue without interruption. Combined gross oil production from the Khurbet East and Yousefieh fields has averaged in excess of 24,000 bopd to date during the month of August following commissioning of an additional Khurbet East sub-station facility on August 6, 2011.

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Suncor Reviewing New U.S. Sanctions Against Syria

- Suncor Reviewing New U.S. Sanctions Against Syria



Aug 19, 2011

Suncor Energy (NYSE:SU) is reviewing new U.S. sanctions imposed on the Syrian government and a company spokesman said they would adhere to any that affect its otperations.

Suncor operates the $1.21 billion Ebla project there, which supplies natural gas to the domestic market.

Suncor Energy (NYSE:SU) has a potential upside of 71% based on a current price of $30.06 and an average consensus analyst price target of $51.39.

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KOV Spuds Well in Syria

- KOV Spuds Well in Syria

Friday, July 22, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil announced the spud of Itheria-1, the first exploration well being drilled by KOV and its joint venture partners on Block 9, Syria.

The planned total depth of the well is 3,256 meters and it is expected to take 80 days to drill, on a dry hole basis. The well will test a large structure with four-way dip closure defined by 3D seismic in an area approximately 200 kilometers due east of the City of Latakia. Primary targets are sandstones of Ordivician age.

Itheria-1 is being operated by Loon Latakia Limited ("Loon Latakia"), an indirect wholly-owned subsidiary of Kulczyk Oil. Loon Latakia holds a participating interest of 50% in the Block 9 production sharing contract which provides the right to explore for and, upon fulfillment of certain conditions, to produce oil and gas from Block 9, a 10,032 square kilometer (2.48 million acre) area in northwest Syria. Loon Latakia has an agreement to assign a 5% ownership interest to a third party which is subject to the approval of Syrian authorities, and which, if approved, would leave Loon Latakia with a remaining effective interest of 45% in Block 9.

Pursuant to a farmout agreement announced by KOV on 6 September 2010, MENA Hydrocarbons (Syria) Ltd., an indirect wholly-owned subsidiary of MENA Hydrocarbons Inc. ("MENA") will fund 60% of the costs for the drilling of Itheria-1. Accordingly, the costs of drilling Itheria-1 will be shared as follows: MENA: 60%, Triton Petroleum Pte Ltd.: 20% and Kulczyk Oil: 20%.

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Gulfsands Encounters Hydrocarbon Columns in Syria

- Gulfsands Encounters Hydrocarbon Columns in Syria

Thursday, June 02, 2011
Gulfsands Petroleum plc

Gulfsands announced that drilling and testing operations have recently been completed on the Abu Ghazal-1 ("AGZ-1") exploration well in Syria. Potentially significant hydrocarbon columns were encountered within the Triassic aged Butmah and Kurrachine formations. However, a series of drill-stem tests ("DST") undertaken on the well resulted in the recovery of sub-commercial quantities of heavy/viscous oil. The well has now been suspended pending detailed analysis of well results.

The AGZ-1 well commenced drilling operations on January 23, 2011, utilizing the Crosco E-401 drilling rig and was drilled to a depth of 3850 metres Measured Depth ("m MD"). The well was planned to evaluate potential reservoirs within the Cretaceous aged Massive and Triassic aged Butmah and Kurrachine Dolomite formations within a large, fault bound structure identified and mapped on 3D seismic data.

The well encountered the Massive Formation at a depth of approximately 2572m MD, but in spite of elevated gas readings observed while drilling, the section drilled at this location was found to contain relatively poor reservoir properties and drill cuttings indicated only traces of oxidized oil and asphalt.

The Triassic Butmah Formation was encountered at 3287m MD with elevated gas readings and traces of oil in the mud system. Interpretation of wireline logs indicated a significant oil column; however no formation fluids were recovered when testing. The lack of any fluid flow from the formation is currently interpreted to be due to low permeability within the reservoir.

The well encountered the top of the Triassic Kurrachine formations at 3456m MD. Substantially elevated gas readings were encountered while drilling through this section and live oil was recovered in coring operations. Interpretation of wireline logs indicated a significant oil column, with subsequent testing resulting in sub-commercial volumes of very heavy to heavy oil (approximately 12 degree API) being recovered along with highly saline formation water.

The Crosco E-401 rig will now be moved to the Khurbet East No. 19 ("KHE-19") well location on the northwest flank of the Khurbet East field. This well is planned as a further step-out from the successful KHE-18 delineation in the northwest, which encountered high quality karst reservoir in the Massive formation. The KHE-19 well will evaluate an area estimated to contain oil-in-place of approximately 30 MMstb and if the well is successful there will exist an opportunity for possible (3P) Khurbet East reserves to be matured to probable and proven reserves categories at year end 2011.

Gulfsands drilling operations in Syria Block 26, using the Crosco E-401 and E-501 drilling rigs, are continuing as planned and have continued without interruption during recent months.

Ric Malcolm, Gulfsands CEO, said, "While we are pleased to have encountered significant oil columns within the Abu Ghazal well, the production test results have been disappointing. We will now analyze all of the data prior to determining the extent of any further operations at this location. The rig will now move on to drilling the KHE-19 well as we continue with our very busy 2011 program of drilling exploration prospects and development wells."

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